Journal of Financial Planning: January 2023
Gerry Herbison, D.B.A., CFP®, ChFC, CASL, CLF, is currently a Carson executive business coach and adjunct professor of leadership and practice management at The American College of Financial Services. Formerly, Dr. Herbison was a full-time assistant professor of management studies and the leadership programs director with The American College. Carson Coaching is the exclusive coaching partner of the Financial Planning Association.
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Organizations with better leaders outperform organizations with average leaders. Re-search finds that better team leadership results in an increase in team performance of an average of 30 percent (Zenger and Folkman 2017).
To develop leaders, we need to first look at the components of good leadership. Some of the most comprehensive analysis of the factors that impact leadership ability was conducted concurrently at Michigan and Ohio State Universities. The research results were clear—leaders who can drive results while building and maintaining positive team engagement perform better than leaders who only focus on either results or engagement (or neither).
Jack Zenger and Joe Folkman analyzed 360-degree assessments of more than 60,000 leaders to support their original research. This most recent research found that among top-performing leaders, only 13 percent of leaders focused on both results and engagement (2017). One of the interesting findings was that younger leaders tend to focus more on engagement, while older leaders tend to focus more on driving results. In reality, the trick is to work on both.
If you are developing emerging or experienced leaders, share the following information with them, which can motivate them to learn the skills needed to drive results and engagement, and know which skills they need to work on and engage them.
The Categories of Employee Engagement
Emerging leaders need to understand the importance of employee engagement. To do that, it is critical to understand the categories of employee engagement. It can be broken down into three categories:
- Engaged employees, who show up, get their work done and do so with a good attitude.
- Disengaged employees, who show up most of the time, get some of their work done, and usually do so with an apathetic attitude.
- Actively disengaged employees, who show up at the minimum possible level, complete the minimum amount of work, and—more importantly—actively sabotage the productivity efforts of their co-workers and leadership.
It is important to note that only 25 percent of employees are engaged at any given time. It is also important to note that the 75 percent of employees who are disengaged or actively disengaged bring overall productivity down, and they are either actively or passively looking for jobs (Harter 2021).
The Six Skills to Develop to Drive Engagement
But driving engagement can all come down to developing certain skills. Recent research found that there are six categories of skills and behaviors that simultaneously drive both results and engagement (Zenger and Folkman 2017).
- Clearly communicate strategy and individual expectations. The results of doing so are that everyone knows the strategy and direction of the organization and how they individually fit into the plan—their work is more focused on achieving the greatest results. When people don’t know where they are going or how they should spend their time, they are inefficient and less productive.
What this does for engagement is offer a clear direction by letting people know the progress toward goals. Team members actually want to be productive and make a difference.
- Inspire and motivate. The research found that more than three-quarters of leaders were more focused on results than team member engagement. Some leaders get so focused on the expectations of the entire team that they forget that team results are created by an aggregate of team members working together. They forget that treating the individual team members in an engaging and inspiring way results in better team performance.
Time spent inspiring team members results in more enthusiasm to be more productive. One of the challenges is that leaders who are really results-focused can be almost mercenary about expectations, forgetting the importance of inspiration and motivation. Many, but not all, of the results-only leaders also fall into the micromanagement camp, which is neither inspiring nor motivating.
- Set motivating BHAGs (Big, Hairy, Audacious Goals). Setting BHAGs and giving people the support to achieve them drives increased team results because the team has something to work toward and clarity about the big picture.
This increases engagement because BHAGs work on the principle that a rising tide lifts all ships. The challenge with BHAGs is that if they are too big, they can be discouraging, resulting in disengagement. Team members need to feel that the goals are possible.
- Drive trust. Leaders who are not trusted risk creating team members who are constantly questioning the leaders’ motivations. When motivation is questioned, team members end up wasting time by thinking about and discussing the leader’s true motivation. The time wasted diverts team members from productive time.
Building trust will increase engagement because team members will trust their leaders. The interesting thing about trust is that it is described in the abstract but built and broken behaviorally. Leaders need to behave their way toward trust in a number of ways, but the most important trust behavior is telling the truth.
- Develop team members. Leaders who help team members develop their skills end up with more capable and more productive teams. Developing team members shows them that you are concerned about their professional growth and development, which can have a positive impact on their growth within the firm and income potential, thus driving engagement.
One caveat is that developing team members often results in them getting opportunities for promotion. If the leader helps develop the team member, then blocks the promotion because they don’t want to hire and train a new person, the engagement “points” earned across the team can be completely lost.
- Be coachable. A study conducted by McKinsey & Company in 2016 found that 86 percent of leaders said they were inspirational leaders, but another report by Gallup in 2016 revealed that about 82 percent of workers felt their managers were “fundamentally uninspiring,” reported the First Ascent Group.
Leaders who seek improvement through feedback from others are respected. Seeking coaching opportunities is an example to both their peers and team members. Sadly, leaders who don’t seek improvement are one of the greatest causes of team member stress in the workplace.
If you have team members who you would like to see in a leadership role, there are additional technical skills—such as understanding financial reports and business planning—that they’ll likely need to learn, but sharing and coaching toward the skills in the above list is a great starting point.
References
First Ascent Group. n.d. “The Impact of Disconnected Leaders.” www.firstascentgroup.com/news-and-analysis/the-impact-of-disconnected-leaders.
Harter, Jim. 2021, July 29. “U.S. Employee Engagement Data Hold Steady in First Half of 2021.” Gallup. Updated April 8, 2022. www.gallup.com/workplace/352949/employee-engagement-holds-steady-first-half-2021.aspx.
Zenger, Jack, and Joseph Folkman. 2017, June 19. “How Managers Drive Results and Employee Engagement at the Same Time.” Harvard Business Review. https://hbr.org/2017/06/how-managers-drive-results-and-employee-engagement-at-the-same-time.